Constellation Brands’ Modelo Especial has ousted AB InBev’s Bud Light from its top position in the US beer market. The shift comes in the wake of a backlash against Bud Light over a social media promotion featuring transgender influencer Dylan Mulvaney. This move triggered transphobic comments on social media and led to a boycott by some beer drinkers, mainly from conservative quarters.
According to data provided by consulting company Bump Williams and later cited by Reuters, sales of Bud Light and Budweiser plummeted by 24.6% and 9.2%, respectively, for the four weeks that ended on June 3 compared to the same period the previous year. On the other hand, Modelo Especial saw a sales increase of 10.2% during this period.
The backlash against Bud Light that surged in April has now started to impact AB InBev’s shares, which had previously been outperforming both Molson Coors and Constellation Brands in the first quarter of the year.
The data from Bump Williams revealed that Constellation’s Modelo Especial was the best-selling beer brand in the United States, holding an 8.4% share of overall beer sales through retail stores for the period ending June 3. Bud Light trailed behind in second place with a 7.3% share.
Despite the fall-out from the social media promotion, AB InBev CEO Michel Doukeris maintained in May that it was premature to fully assess the impact of the backlash. Meanwhile, beer industry experts suggest that the current situation could advantage competitors like Miller Lite, Coors Light, and Modelo. University of Vermont certified instructor in the business of craft beer Jon Reynolds affirmed this notion, stating that Bud Light’s misstep could lead to these brands capturing a larger market share.
AB InBev’s total sales growth declined 12% in the four weeks ended May 20, according to data from NielsenIQ and TD Cowen. Analyst Vivien Azer from TD Cowen suggested that this fall would “fully capture the boycott”, in contrast to the 3.6% sales growth decline AB InBev saw for the four weeks ended April 22.
The controversy aside, established “light” brands like Bud Light had already been experiencing declining sales volumes over the past six years. Euromonitor International data shows that these brands were losing ground faster than the US beer sector as a whole, as consumers’ preferences shifted towards craft beers and subsequently, hard seltzers.
Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
